Upstream Oil and Gas Development and Production

Advancements in horizontal drilling and frac’ing techniques are driving widespread development of domestic, non-conventional oil and gas reserves.

In recent years the U.S. oil and gas production market has transitioned from a trend of slow, long-term decline to become the second largest producer of oil and gas in the world. Despite recent commodity price pressures, we are bullish on the long-term growth prospects for domestic oil and gas producers. As a result of expected long-term growth in domestic oil and gas production, the need for oilfield services and equipment is expected to continue to increase in many geographic regions, ranging from the Marcellus and Utica shale regions in the northeast, to the Bakken shale in North Dakota, to many active basins in west and south Texas.

We are focused on companies that provide equipment and services that make the development and production of oil or gas more economic and efficient or that reduce environmental impact and improve workplace safety. These companies are well-positioned to benefit from long-term growth in domestic production and the continuing reliance by operators on high-quality service providers. While recent commodity price fluctuations have had a significant near-term impact on the industry, we believe that the battle-tested companies that emerge from this cycle will be attractive to oil and gas operators who will be seeking to partner with the strongest and most efficient service and equipment providers as production growth resumes.